Indian shares snap four-day downtrend on select buying

Tuesday, 24 February 2004, 08:00 Hrs
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MUMBAI: India's blue-chip share market index finished moderately higher Monday, reversing its four-day losing streak, with institutional investors resorting to bargain hunting in select old economy heavyweights.

Analysts say though the market managed to inch higher Monday the overall market mood continues to be shaky ahead of the launch of a slew of new public offerings by private as well as public sector companies.

The stock market barometer 30-share Bombay Stock Exchange sensitive index or Sensex closed at 5,734.44, representing a gain of 36.40 points or 0.64 percent over its previous session's close.

The market has shed a whopping 5.5 percent in the last four straight sessions on across-the-board institutional selling pressure.

Dealers said that the market opened with a negative gap Monday on sustained selling pressure in shares of blue-chip public sector companies ahead of the launch of some big-ticket public issues by state-run firms.

The market moved within a close range for better part of the day before staging a recovery towards the end of the trade on buying in shares of automobile, cement and steel companies at attractively lower levels.

"Some amount of bargain hunting was perfectly in order after last four consecutive sessions' fall. Institutional investors find the current levels of heavyweight counters very attractive," said a broker with the Bombay Stock Exchange.

"Despite today's moderate gains the overall market mood continues to be jittery in view of the launch of a slew of initial public offerings over the next couple of weeks. There are some genuine concerns on the liquidity front."

India's biggest-ever public issue season is set to begin soon, with a host of public sector and privately owned companies queuing up to tap the investor appetite in a booming share market.

In what analysts say will be the busiest session in the Indian share market's history, as many as seven state-owned companies will float shares over the next one and a half months to raise a whopping 150 billion ($3.3 billion).

The public issue fiesta on the bourses will be led by the Indian government that has lined up equity offerings from as many as half a dozen public sector companies as part of its ambitious privatisation drive.

In the old economy sector, Hero Honda Motors, India's largest motorcycles maker, gained 6.1 percent to touch 513.40 on fresh institutional buying triggered by hopes that the company would post robust sales growth in the fourth quarter.

Bajaj Auto, a leading two-and-three wheelers maker, rose five percent to 906.80 and cement and construction major Larsen and Toubro closed with a gain of 4.6 percent at 545.30.

Index heavyweights like State Bank of India ended 3.3 percent higher at 607.15, tobacco giant ITC was up 2.2 percent at 1,114.30 and consumer goods major Hindustan Lever closed with a gain of 0.9 percent at 175.90.

In the technology sector, Hyderabad-based Satyam Computer gained nearly one percent higher at 302 on fresh institutional buying interest.

Infosys Technologies, on the other hand, closed with a loss of 0.8 percent at 5,040.35 and software major Wipro ended 0.2 percent higher at 1,463.25.
Source: IANS
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